China Bonds Update
Big news today after the Occupy movement is officially over.
(Bloomberg) — China will no longer require a minimum amount of operating funds to be transferred from a foreign bank’s parent to its newly-established Chinese branch, according to a statement posted on the State Council’s website.
- New rules no longer require foreign banks to first establish a Chinese representative office before they set up branches or joint ventures
- Foreign banks will be able to apply for renminbi business if they have operated in China for at least a year, vs. previous requirement of three years
- Foreign banks applying for renminbi business are no longer required to have made profits for two consecutive years before submitting application
- New rules will start to take effect from Jan. 1
Well, we now know that part of the reason for the rally is $39 bio in insurance capital according to the China Securities Journal.
The clean up continues in China as 63,000 officials were forced to quit their company directorships. http://www.shanghaidaily.com/article/article_xinhua.aspx?id=259820
My thoughts – all these changes and more changes as all signs point to a slowdown which is substantiated by the rise in bad loans at CCB, ICBC, BOC and Agricultural Bank of China.
Rates spiked on the week on 12 IPO pricings into next week, the stock market breaking a 4 year high, rising 24% in just 1 month ! even as the Shanghai-HK Connect demand falls for a 4th consecutive week to its lowest since launch.
USDCNH up to a new 6 mth high of 6.2238.
All these building up into expectations for Q1 rate cut next year, if you ask me.
Leaving you with the indicative prices.